Cigarette Smuggling

News, information and statistics about the illicit tobacco trade. Cigarette smuggling on the black market and other facts collected from tobacco companies, security agencies and other public information sources.

22 percent of the alcohol sold in Costa Rica is sold illegally without the payment of taxes, according to the Finance Ministry. Over 90 percent of the contraband alcohol is smuggled into the country.

Financial authorities also seized 12.3 million black market cigarettes that were being smuggled without the payment of duties in the first 10 months of 2013. The amount of illegal tobacco seized was 5 times higher than the 2.3 million black market cigarettes that were seized in all of 2012.

The Vietnam Tobacco Association states that over 100 different brands of cigarettes are smuggled into Vietnam each year. The brands Jet and Hero are the most popular, with the two brands consisting of over 90 percent of the smuggled tobacco in the country.

Roughly 20 percent of the country’s tobacco market is smuggled cigarettes. Most of the black market tobacco are smuggled into the country from China, Laos, Malaysia and the Philippines.

Source: “Vietnam Prepares For Rise In Cigarette Smuggling As New Year Festival Looms,” Bernama, November 13, 2013

According to a study conducted by KPMG, 1,433 tonnes of illegal tobacco was smuggled into Australia in 2013, an increase of 154 percent from the previous year.

13.3 percent of all tobacco sales in Australia were of black market cigarettes.

With taxes and fees included, people in Australia pay nearly $20 Australian dollars for a pack of cigarettes. In the South East Asia region, where many of the cigarettes are smuggled from, the packs of tobacco can cost as low as $1.08 AUD.

It was previously reported that the Australian Government losses up to $2.1 Billion a year due to cigarette smuggling.

Australia’s government lost up to $1.1 Billion in tobacco tax revenue in 2012 due to cigarette smuggling activities.

Security agencies in Australia 82 million black market cigarettes in 2011. In 2012, the number of illicit cigarettes increased to 122 million.

2.7 billion cigarettes were smoked in the country in 2012 that were purchased without the payment of taxes, or 11.3 percent of all cigarettes smoked. Most of the contraband cigarettes were either smuggled into Australia from China or South Korea or produced in homegrown tobacco shops.

A survey conducted by accounting company PwC found that 18 percent of consumers in Britain admitted to purchasing counterfeit alcohol. 16 percent reported purchasing counterfeit drugs such as Viagra and weight-loss pills. And 13 percent admitted to buying counterfeit cigarettes.

British consumers between the ages of 18 to 34 bought the most counterfeits, with 60 percent saying that they bought pirated movies and music and 55 percent have bought replica clothing.

A study by the International Tax and Investment Centre and Oxford Economics found that 900 million cigarettes were bought on the black market in Singapore. The amount of tax revenue lost to the government was estimated to be around $276 Million (347 Million Singaporean Dollars).

Based on the total amount of cigarettes smoked in Singapore, roughly one in four cigarettes smoked in 2012 was purchased on the black market.

Security agencies arrested 6,248 people for buying illegal cigarettes in 2012, an increase from the 5,977 arrested in 2011.

Tax enforcement officials in Malaysia investigated 175 cases of counterfeit cigarette sales in the country between 2012 through September 2013. The value of the black market cigarettes seized by security agencies was worth $36,000 (117,800 Malaysian Ringgit).

A legitimate pack of cigarettes with taxes included is sold for $2.17 (7 Ringgit). A counterfeit pack is sold illegally for $0.93 (3 Ringgit).

Source: Bernama, “Smuggling of fake cigarettes on the rise,” New Straits Times, September 26, 2013.

An independent research organization in Romania released a study that claimed $24 Billion (€18 Billion) in government revenue was lost due to tax evasion activities. The amount lost is equal to 13.8 percent of the country’s GDP. In terms of percentages, the amount lost in 2012 was slightly lower than the record high of 15 percent in 2011.